This week will mark one year since the KORUS FTA signing. Far too soon for either side to go popping corks, but those popping off about the devastating damage it would do to the South Korean economy might want to look at the early trade numbers. It would seem Korea is doing fine.
According to government data, South Korea’s exports to the U.S. reached US$53.8 billion between March 2012 and January 2013, up 2.67 percent from a year earlier, while imports dropped 7.35 percent on-year to reach $39.1 billion over the cited period. South Korea enjoyed a trade surplus of $14.7 billion during the cited period, up 44 percent from a year earlier, the data showed.
I am no economist, but 44% is a decent gain, right?
Another Yonhap report said that U.S. imports from all countries rose 3 percent in January, while imports from Korea soared 18 percent. And, according to a Korean commerce official:
“Lowered tariffs allowed local firms to sell their products overseas at lower prices, raising the competitiveness of those companies.”
Go figure. Lower tariffs + good products + world’s richest market = competitive gains. Freaky.
This is not to say that sectors of the SK economy are not taking a hit. I haven’t seen the complete numbers, but American oranges are doing well –up 30% over last year on $150 million in sales– along with cherries jumping 80% to $80 million.
As for U.S. car imports, they have doubled this past year –though there is some debate as to what exactly the words “country of origin” mean. That will likely get more traction considering that the American-produced Toyota Camry was voted Korea’s Car of the Year by Korean journalists last month.
That aside, the South Korean auto industry looks to be benefiting quite well from the pact. (Though it should be noted, Americans have more money to spend than previous years.)
Vehicle exports to the U.S. gained 21 percent on-year to $10.22 billion over the cited period, while vehicle imports almost doubled to $720 million…Auto parts, among others, benefited most from the trade pact with exports to the U.S. rising 12.6 percent to $5.23 billion, according to the data.
On a side note, things are not going so well –or maybe they are– with the Korean-EU FTA, says Hankyoreh. They claim that the numbers out of Brussels and those out of Seoul are painting different pictures of who is getting the most out of their trade pact.